Kiwibank eyes growth in business banking

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NZ Post says it has ambitious plans for its subsidiary Kiwibank to take a bigger slice of the business banking market after figures mistakenly released in last week's Budget showed a substantial increase in lending next year.

A five-year forecast of movements in Kiwibank's mortgage book contained in the Government's Budget Investment Statement prepared by the Treasury had the bank scratching its head. Kiwibank said the growth estimates for year one at $837 million and years four and five at $87 million and $86 million were too low. The forecast for year two - next year - was too high.

The bank saw growth in lending rise by $1.9 billion in the 2010 financial year and expects more restrained growth, but that it would be maintained at about $1.5 billion a year for the foreseeable future.

The Treasury says the numbers were from Kiwibank's parent, NZ Post, and were signed off by senior NZ Post executives.

This week an NZ Post spokesman told the Herald the $2.2 billion growth forecast for next year was "predicated on the Kiwibank business plan for diversification in its mortgage portfolio to venture more into the business side of things".

Kiwibank spokesman Bruce Thompson yesterday acknowledged the figures which "did not reflect the bank's performance or anticipated performance", had been supplied by the bank itself and were incorrect.

However he also confirmed that the forecast for $2.2 billion in growth next year did reflect Kiwibank's ambitions in business lending. KiwiBank had been in the small and medium size enterprise market for some time. "And there's certainly huge potential in that market. Maybe we anticipate some very strong growth there."